Offshore Brazil developments and projects continue to ramp up

By Ariana Hurtado, Editor and Director of Special Reports

Brazil is undoubtedly a hot region, with offshore project updates being released on almost a weekly basis throughout 2024. 

“In terms of liquids production, Brazil is expected to see the highest growth in offshore production amongst all countries globally by 2030 as compared to 2024 levels,” Santosh Kumar Budankayala, vice president of upstream research with Rystad Energy, told Offshore.

“In 2025, Petrobras is expected to lead in terms of offshore exploratory drilling yet again. It has been trying to acquire drilling permits to drill in the Foz do Amazonas Basin. If these permits come through, this would be a significant breakthrough as it has been struggling to get approval to drill in this basin. It has also reaffirmed in exploration investment plans in its 2024-2028 exploration strategy where it unveiled plans to invest US$7.5 billion in exploration investments to drill ~40 wells across Brazil’s southeastern and Equatorial margin basins.”

International operators slowed down drilling activity in 2024 due to mixed results seen in earlier years, Budankayala added. However, bp is expected to drill in late 2025 or in 2026 in the Bumerangue and Tupinamba blocks. bp also drilled its first well offshore Brazil as an operator in almost 11 years after it spud a well in the Pau Brasil Block in 2024.

History of success offshore Brazil

“Brazil has seen huge discoveries made in the past, with Tupi being the first large discovery that was made in 2006. Buzios was another large find that was made in 2010. Both of them being multibillion barrel finds,” Budankayala said. “Operators have tried to recreate this success over the past few years and have seen mixed results.” 

From 2017 to 2019, companies spent more than US$11 billion in acquiring blocks across the Campos and Santos basins, which the Rystad analyst deems an indication there is “some untapped potential.” 

“However, exploration activity since 2014 has not resulted in any multibillion-barrel finds as was seen in the past,” Budankayala added. “Over the past few years, international operators such ax Exxon, Shell, bp, Equinor and Petronas have spun their drillbits in search of discoveries, [and] Petrobras has also continued to perform exploratory drilling.

Outlook

Brazil’s oil and gas production is estimated to increase over the next five years, peaking in the early 2030s, driven by the country’s offshore presalt discoveries, according to a September 2024 Rystad Energy report. 

According to Rystad, Petrobras remains “a dominant operator” in South America.

Petrobras investments in third-quarter 2024 totaled $4.5 billion, with the company continuing to focus primarily on large presalt projects. In the first nine months of 2024, total investments reached $10.9 billion, the company reported. 

Rystad reports a positive near-term production outlook for Brazil, but it forecasts the country should expect a decline to begin in the next decade. 

“This presents the challenge of reserve replacement to sustain production and stem the decline,” the report stated. “One solution is infrastructure-led exploration (ILX), utilizing increasingly spare infrastructure capacity in the mature Campos and Santos basins to commercialize smaller, undeveloped accumulations.”

The market intelligence firm says previously relinquished discoveries could be developed by leveraging existing infrastructure. The Campos and Santos basins contain more than 40 fields with more than 3 Bboe in relinquished discoveries. 

“However, regulatory agencies play an important role in developing these discovered but relinquished resources,” the report stated. “For ILX developments to move forward in these blocks, Brazil's National Petroleum Agency (ANP) would need to offer them in future bid rounds or permanent offers. Additionally, regulations around infrastructure sharing need to be developed to ensure efficiency gains across all operators in the region.”

Santos Basin updates

On Oct. 30, the Marechal Duque de Caxias (Mero 3) FPSO began producing oil and gas at the Mero Field in the Libra Block in the presalt Santos Basin. The FPSO has the capacity to produce up to 180,000 bbl/d of oil and compress up to 12 MMcm/d of gas.

Also in October, the Almirante Tamandaré FPSO arrived in Brazil from China. This unit will be installed at the Búzios Field in the Santos Basin. The Almirante Tamandaré is the first high-capacity FPSO to be deployed in the field, Petrobras reported, and it has the potential to produce up to 225,000 bbl/d of oil and process 12 MMcm/d of gas.

Rystad reported that output has increased in the Santos Basin since the first presalt ultradeepwater discovery in 2006, which has led to the Tupi and Buzios field developments. The Santos Basin accounted for 74% of Brazil’s total output in 2023, and Rystad predicts it will contribute 80% by 2030. “However, after this production peak, Brazil’s output is projected to decline by an average of 10% annually through 2050,” the report stated.

Campos Basin updates

The Campos Basin “dominated Brazil’s offshore sector before the presalt developments,” Rystad reported. The basin has been producing for more than 45 years, mainly due to life extension projects. For example, nine platforms at the Marlim Field were replaced in 2023 by two new FPSOs as part of a revitalization program. Several previously producing wells will be reconnected to the Anita Garibaldi and Anna Nery FPSOs, which are designed to be able to sustain higher water cuts due to their higher water processing capacity.

The Maria Quitéria FPSO, which was originally scheduled to begin operations in 2025, produced its first oil early on Oct. 15. Installed at the Jubarte Field in the presalt Campos Basin, this FPSO can produce up to 100,000 bbl/d of oil and process up to 5 MMcm/d of gas.

FPSOs

“Brazil accounts for 45 of the 167 FPSOs operating worldwide, and 15 of the 36 FPSOs on order are destined for the country, representing over 40% of global demand,” the report stated. “Brazil's established FPSO market, combined with its expertise in deepwater developments, allows companies to consider redeploying FPSOs to commercialize undeveloped projects.”

Subsea spending

Brazil is driving strong demand for subsea equipment and SURF, according to another Rystad report released in mid-August. “Anticipated expenditure in Brazil is set to surge 18% from the previous year, to $6 billion in 2024,” the report stated.

Global ultradeepwater projects, driven by major FPSO initiatives in Brazil and Guyana, are projected to capture 35% of the market. South America is expected to lead globally with 500 subsea tree installations over the next five years. Upcoming ultradeepwater greenfield projects (beyond 1,500 m) include Yellowtail, Tilapia and Redtail in Guyana, alongside Buzios VIII, Buzios IX, Sepia and Atapu in Brazil. 

In the SURF sector, global installations are expected to reach 3,500 km in 2024, and Brazil is forecast to account for 22% of that total. The installation rate is projected to increase at a CAGR of 15% from 2024 to 2028, with Brazil being one of the major markets.